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Wynne promises $29B for transit

Tuesday, 15 April 2014 - 12:57pm

By Maria Babbage THE CANADIAN PRESS

TORONTO—The governing Liberals are promising to pave the way for $29 billion to be spent on new transit and transportation infrastructure in Ontario over the next decade, but they aren’t rolling out the entire blueprint yet.
Some of the money will come from re-routing about $1.3 billion a year in gas taxes, Premier Kathleen Wynne said yesterday. The remainder will be raised through debt—including green bonds—and new “revenue tools” that will be kept under wraps until the budget is tabled.

The fiscal plan could make or break the minority Liberals, who need at least one of the opposition parties to support it if they want to avoid an election.
“We need a partner to put our plan in place,” Wynne said in a lunch speech to the Toronto Regional Board of Trade.
“That partner could be the Progressive Conservatives, it could be the NDP or if necessary, the voting public.”
But Wynne wasn’t in a cajoling mood, saying the Tories would be “robbing Peter to pay Paul” by cancelling rural and northern projects to fund Toronto subways and dismissing the NDP as having no plan at all.
Wynne said she would divide $29 billion into two dedicated funds: $15 billion to build public transit in the Toronto-Hamilton area and $14 billion for transportation infrastructure—including roads and bridges—in the rest of the province.
Instead of hiking fuel taxes, Wynne said she would detour the provincial portion of the gas tax—about $1.2 billion annually—to the two funds rather than the main government coffers.
Municipalities would still get the two cents per litre—about $320 million—they currently receive for transit projects, she said.
Ontario’s portion of the HST that’s collected on gas taxes, which amounts to about $130 million a year, would also be re-directed to the funds, she said.
But that leaves a $1.3-billion annual hole in the province’s general revenues. And it’s not nearly enough money to fulfil her 10-year pledge to build transit, roads and bridges across the province.
It also bucks recommendations from Metrolinx, the provincial transit authority, and a government-appointed panel that was paid about $90,000 last year to whittle down options to fund public transit.
Wynne wouldn’t say how the Liberals—who are already facing a $11.3-billion deficit, lower-than-forecast revenues and weak economic growth over the next 20 years—would fill that gap.
“That’s the part that you’re going to have to wait for the budget for, because all of the pieces will fit together,” she said.
Their plan will show how programs currently funded by gas taxes will continue, as well as new levies to raise the rest of the money that’s needed for transit and transportation infrastructure over the next 10 years, she said.
Wynne has ruled out increases to gas taxes, HST or income taxes on middle-income earners, which the government defined in its recent economic outlook as workers making between $25,000 and $75,000 a year.
But the premier was tight lipped on whether those earning more than $75,000 would take a hit to fund transit.
Ontario has shares in General Motors—purchased during the recession—that it could sell to build new infrastructure, she said.
Finance Minister Charles Sousa also mused last week about “maximizing the value” of provincial cash cows, such as the Liquor Control Board of Ontario, as well as Crown corporations like Ontario Power Generation and Hydro One.
The Liberals promised in last year’s budget to raise money through high-occupancy toll lanes, which would allow motorists to pay to use the high-occupancy lanes that are usually reserved for those who have one or more passengers.
The Progressive Conservatives have proposed a similar plan: create a trust that would provide $2 billion a year to expand public transit in the Toronto-Hamilton area, partly by re-directing existing government funds.
They say they would also distribute the provincial share of the gas tax to municipalities and take over responsibility for highways in Toronto and the Ottawa region. But they’ve pledged not to raise taxes.
The New Democrats, who are opposed to so-called HOT lanes, say they want to build transit but haven’t said how they’d fund it.
Yet the party went on the attack yesterday with a website and flyers slamming the Liberals for what the NDP called “waste, delays and mismanagement” of the transit file.